Compensation

Information related to the remuneration for the corporate officers of the Company

(information published on 25 April 2017 in accordance with AFEP and MEDEF recommendations)
The roles of Sequana’s Chairman of the Board of Directors and Chief Executive Officer are combined and entrusted to Mr Pascal Lebard.

The annual compensation paid to the Chief Executive Officer comprises a fixed portion and a variable portion determined by the Board of Directors based on recommendations made by the Nominations and Compensation Committee.

Fixed portion

The fixed portion of Pascal Lebard’s annual compensation, corresponding to €900,000 since 2010, was maintained at same amount for 2017, pursuant to a decision of the Board of Directors’ meeting of 21 April 2017.

Variable portion

At its meeting on 29 March 2016, the Board set the criteria to be used to calculate Pascal Lebard’s variable compensation for 2016. The latter may represent up to 100% of its fixed compensation if all the corresponding performance criteria are met. The Board also reserved the right to increase his variable compensation to 110% of his fixed compensation if it deems such a rise justified in light of any exceptional transactions that may take place in 2016. These criteria are based on:

The Sequana group’s operating results and cash management (weighting each 35%), including the amount of the Group’s Ebitda and the Debt/Ebitda ratio, both of them being compared to the 2016 budget as set out by the Board at the end of 2015,

3 qualitative conditions, each weighting 10%, which are the implementation of the Arjowiggins Security recovery plan, the follow up and the implementation of the succession plan for the Group’s senior executives as set out in 2016 as well as the continuation of the Group’s strategic plan.

At its meeting on 21 April 2017, the Board considered, after having reassessed the above mentioned objectives and taken into account the exceptional transactions which may have taken place, that:

The objectives related to the Sequana group’s operating results and cash management mentioned above (Ebitda, Debt/Ebitda ratio) were not satisfied,

The implementation of the Arjowiggins Security recovery plan criterion was satisfied up to 7% out of the set out 10%,

The follow up and the implementation of the succession plan as set out in 2016 criterion was satisfied up to 8% out of the set out 10%,

the continuation of the Group’s strategic plan criterion, which weighted 10%, was fully satisfied,

No rise was justified in Pascal Lebard’s compensation as regards the qualitative objectives. This is despite his exceptional work achieved in 2016 while the Sequana group was facing difficult environmental conditions.

Pascal Lebard’s variable compensation for the year 2016, sum payable in 2017, corresponds to 25% of its targeted amount, i.e. 225,000 euros.

At the same meeting, the Board also set the criteria to be used to calculate Pascal Lebard’s variable compensation for 2017, which may represent up to 100% of his fixed compensation. These criteria are based on:

Quantifiable criterion: the amount of the Group’s Ebitda being compared to the 2017 budget as set out by the Board at the end of 2016, which represents 40% of the total amount of the variable compensation.

Qualitative criteria:

Full success in the listing of Antalis International and its monetisation through new financial transactions for Sequana, representing 30% of the variable compensation,

A satisfactory evolution of the Arjowiggins group’s strategic plan along with a solution to Arjowiggins Security’s difficulties, representing 30% of the total amount of the variable compensation.

Other compensation or benefits

Pascal Lebard does not receive any specific compensation for his duty as Chairman of the Board of Directors or any attendance fees other than those related to his tenure as a director and committee member. In this respect, the attendance fees he received during 2016 have a total amount of 63,787 euros.

Pascal Lebard receives no other benefits in kind other than the providing of a vehicle, the annual amount of which is valued to 2,106 euros.

He does not benefit from any variable multi-year compensation system. Neither during 2016 nor in respect of 2016, he did not receive any exceptional compensation, no stock subscription or purchase options were granted to him and no free shares (including performance shares) were awarded to him. Pascal Lebard benefits from the same pension scheme as Sequana’s other executives, i.e., a “traditional” scheme. He has the same rights as the company’s other executive employees in terms of health cover and travel insurance, and is not entitled to any further benefits.

On 28 April 2015, the Board of Directors determined the compensation, indemnities and benefits (“termination benefit”) for which Pascal Lebard could be eligible in the event of the termination or a change of his position as Sequana’s Chairman and Chief Executive Officer. This termination benefit may represent up to 1.5 times Pascal Lebard’s annual salary at the date his duties are terminated (based on his fixed compensation for the year plus the most recent amount paid for his variable compensation). The amount of the benefit will depend on the same performance conditions as those set by the Board for his variable compensation for the two years preceding the termination of his duties, with each condition carrying the same weighting. These financial conditions fully comply with the recommendations of the AFEP-MEDEF Code. The termination benefit will not be payable if Pascal Lebard (i) leaves the company at his own initiative, (ii) is no longer an executive corporate officer at the date of his departure, or (iii) is entitled to claim his retirement pension within a short period following his departure.

This termination benefit was determined by the company in favour of Pascal Lebard on 28 April 2015 and was then approved by the Annual Shareholders’ meeting on 23 June 2015.

Should the next Annual Shareholder’s meeting approve the renewal of Pascal Lebard’s term in office recommended by the Board of Directors and the renewal of his office as Chief Executive Officer, the Board decided on 21 April 2017 to maintain its previous decisions as regards the termination benefit in favour of Pascal Lebard, with the same terms and conditions mentioned above. This benefit will be submitted to Sequana’s Annual Shareholders’ meeting on
6 June 2017.